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22 September, 19:27

Barrington Mills Manufactures denim cloth from two primary raw materials, cotton and dye. Work-in-process includes lapped cotton, spun yarn, and undyed cloth, while finished goods includes three grades of dyed cloth. The average inventory amounts and units costs on hand at any given time are as follow

Raw Materials Inventory Levels Unit Costs

Cotton 70,000 lbs $2.75

Dye 125,000 gal $5.00

Work-in-Process

Lapped Cotton 2,000 rolls $10.50

Spun Yarn 5,000 spools $6.75

Undyed Cloth 500 rolls $26.10

Finished Goods Grade 1 Cloth 250 rolls $65.00

Grade 2 Cloth 190 rolls $80.00 Grade 3 Cloth 310 rolls $105.00The company operates 50 weeks per year and its cost of goods sold for the year was $17.5 million. Determine the company's weeks of supply.

(A) 20.21 (B) 19.43 (C) 9.09 (D) 22.54

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Answers (1)
  1. 22 September, 20:29
    0
    weeks of supply 2,7122857

    Explanation:

    17,500,000 / 50 weeks = 350,000 COGS per week

    current finished inventory:

    250 x $ 65 = 16,250

    190 x $ 80 = 15,200

    310 x $ 105 = 32,550

    Total 64,000

    cost added:

    70,000 materials x $ 2.75

    125,000 materials x $ 5.00

    total 817500

    WIP:

    2,000 rolls x $ 10.50

    5,000 spools x $ 6.75

    500 rolls x $ 26.10

    total $ 67,800

    Total inventory: 817,500 + 67,800 + 64,000 = 949300

    week of supply:

    inventory of 949300

    and 350,000 goods are consumer per week

    week: 2,7122857
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